Goldman, Temasek invest $110m in Shanda’s Cloudary unit

The capital will be used to develop new business strategies, including allowing authors to sell e-books online, said Robert Chiu, president of Shanda Interactive and chairman of Cloudary.

Details of the transaction were not disclosed but Bloomberg reported that the purchase price is at a 25% lower valuation to the previous round. Last year, Cloudary received $15 million funding from Orbis entities for a 1.875% stake, valuing the company at about $800 million.

The literature publishing platform filed to list on the New York Stock Exchange in May 2011, targeting a $200 million IPO. Goldman was named as lead underwriter but was subsequently replaced by Merrill Lynch, CITIC Securities and China International Capital Corp. There hasn't been a filing since June of last year.

Parent Shanda Interactive has completed a privatization in early 2012 that valued the company at $2.3 billion.

As an online service for original literature, Cloudary generates revenues from sales of books and other publications through chain and online bookstores and wholesalers, as well as copyright licensing and online advertising.

The company's six original literature sites totaled 1.6 million authors and six million titles as of March last year. The company claimed to have 66.9 million monthly visitors in the first quarter of 2012, citing iResearch data.

In 2009, 2010 and 2011, the company posted net revenues were RMB134.6 million ($22.1 million), RMB393.0 million and RMB701.1 million, respectively. It recorded net losses of RMB74.5 million, RMB56.5 million and RMB35.9 million in these three years.

 

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• Topics
• Greater China
• Technology
• Expansion
• China
• Goldman Sachs
• Temasek Holdings
• TMT
• IPO
• Growth capital